BTI Consulting recently shared its Market Outlook and Client Service Review for 2015 in a webinar. During the hour long presentation, researchers walked attendees through what they see as shifting trends in the global legal market space.
Even though the outlook is more optimistic this year than last year, it still seems the law firms that stand to gain the most will have identified – and successfully executed – in specific market segments.
A Legal Market Narrative
Our high-level takeaway from the webinar is that the legal market is more optimistic, but not too optimistic. Here are three overarching trends BTI identified based on its survey research:
- Client expectations are still high. Fewer firms will meet the expectations that allow them to capture newly available business development opportunities. In previous webinars, BTI has referred to this environment previously as the “Predator’s Paradise.”
- A billion dollar opportunity. While companies in the Fortune 1000 category are still cutting back legal spend, BTI says global companies are funneling more dollars into outside counsel spend – and specifically in the US legal market. The researchers say global companies will add about $1 billion dollars in spending.
- Vice grip on outside counsel softens. While corporate legal is still under pressure to contain costs, corporations are beginning to increase their outside counsel spend in select practice areas. BTI identified some of those areas as: cyber security and data privacy, media & technology, IP litigation, M&A and regulatory.
3 Law Firm Practice Areas of Opportunity
Our own data analysis shows that some practice areas are growing faster than others. Indeed BTI Consulting presented a similar finding on this webinar – in these three sectors:
1. Cyber security explodes. Large corporations have set aside investment in outside counsel spending in this area, which makes it a prime opportunity for law firms positioned for success.
2. Food, agriculture and spending on litigation. BTI says companies in the food and agriculture segments are spending three times more on litigation than businesses in other vertical markets.
3. Healthcare work soars. The researchers predict legal work in health care willincrease in almost every practice area including cybersecurity, class action, regulatory among others.
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Mr. Rynowecer noted, as an underlying theme across trends, that the relationship dynamics between corporations and law firms is changing. Many managing partners have moved into the Office of General Counsel and as a result are running legal departments like mini-law firms.
This leaves law firms with the question: does this mean a continued decrease in outside counsel spend?
Not necessarily, law firms that evolve and shift from legal professionals to business partners will have a competitive advantage. By helping their clients improve early case assessment, get better at triaging matters and adding more business value, law firms can gain ground in 2015.
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